The flaw in this idea is that it relies on a hopelessly idealistic view of human nature.JohnB wrote:I think that money based on LETS could be a great way to go, because currency just appears out of thin air.
I pay you for something by making a LETS payment. You have some currency and therefore some wealth. I have a debt, but it's not linked to any physical assets, so I only have a moral obligation to repay the debt if I can. Wealth has appeared from nowhere!
You can use that wealth to trade, and at any time some people will have wealth and others will be in debt, but if you acquire more wealth than you can spend, the surplus is worthless. It doesn't give you any power or influence, but it might make some people think that you're not playing fair and you may be socially excluded. You could give it away to people who are in debt for good reason, because holding excess wealth does you no good.
I keep spending and run up big debts. I may be seen as lazy and selfish because I'm taking advantage by not playing fair, and may be socially excluded.
But if I'm not able to create wealth, because I'm old, ill, or am doing work that benefits society that I'm not paid for, the debt doesn't matter. By creating that debt I've helped others to acquire wealth, and I'm playing fair and not harming anyone. It doesn't matter if I can't repay the debt. Maybe someone with excess wealth will give me their surplus as it doesn't do them any good, and it shows appreciation that I'm not in a position to clear my debt.
It automatically includes social security benefits, because people in genuine need can legitimately get into debt without any requirement to repay it. But people who don't play fair, by acquiring excess wealth, or getting into big debt, can be ostracised and will ultimately starve.
It's simple, and it works with or without economic growth
There's no such thing as society, we all know that, so how can there be social ostracism? It may be a nice system for a hippy commune but it won't work in the nation at large. Most people are just out for themselves and will take advantage of the system while putting nothing back. It will collapse in 5 minutes.
I don't know much about LETS: if it's so easy to create money, what is to stop people just giving presents of money to themselves? I've heard also that unofficial currency schemes are wide open to fraud.
NEVER underestimate the basic opportunism of human nature. My rule in life is never to trust anyone until they've given you good reason.